News Now

CU System

L.A. Council OKs bank development districts for CUs banks

LOS ANGELES (11/3/09)--The Los Angeles City Council decided Friday to draft an ordinance that would benefit credit unions by creating districts for banking development throughout the city, according to a local business journal. The Los Angeles Business Journal reported Friday that the ordinance, which was proposed in May, would provide property tax relief and expedite land-use approval for credit unions and banks to open branches in underserved areas. The ordinance is modeled after a similar measure passed in New York City. The ordinance would guarantee municipal deposits for credit unions and banks. The city treasurer also will create a task force to work with department heads and council members to determine how to model the Los Angeles program after the New York City program. Councilmember Richard Alarcon introduced the ordinance in response to the high number of payday lenders and check-cashing outlets in low-income areas of Los Angeles. The lenders and outlets outnumber credit unions and banks and charge customers unnecessary fees. Each year, unbanked families pay more than $100 million in fees because they don’t have access to local banks, Alarcon said. Los Angeles has more than 1,200 check-cashing outlets and payday lenders, according to Pew Charitable Trusts.